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On 22 June 2017, Chinese legislators released draft proposals to combat soil pollution in China at a bimonthly session of the Standing Committee of the National People’s Congress. The legislation complements the State Council’s ambitious plan to address soil pollution – an area not specifically covered by Chinese environmental law at present. Both the Council’s plan and the corresponding draft legislation are a response to a series of highly publicised incidents, including one in Jiangsu Province where nearly 500 school students fell ill after exposure to contaminated soil. These incidents have focused public attention on the issue of soil contamination, which had previously received little attention due to the more obvious air pollution issues in Chinese cities.

The proposed law is similar to the United States Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), in that the law requires landowners to investigate soil contamination where it is identified and imposes liability for soil contamination cleanup on the parties responsible for the pollution — or, if the responsible party cannot be found, on the landowner. The proposed law also establishes a pollution cleanup fund for situations in which the responsible party or landowner either cannot be located or lacks the funds to pay. In cases where the contamination occurred prior to the passage of the new law, a landowner held responsible may also apply to the cleanup fund for reimbursement of the remediation costs. In addition, the proposed law calls for regulators to establish tax benefits for soil remediation, standards for soil monitoring, reporting of contamination data, limits on the release of hazardous substances on farmland, and for more stringent environmental impact evaluations of construction projects (including the prohibition of construction on polluted land until the land has been remediated to the applicable standard).

Pollution of farmland is subject to particularly heavy penalties under the proposed law, including fines of up to CNY2 million ($US297,000). These penalties likely are a response to various surveys, including a 2014 government report that concluded 19.4% of China’s farmland is contaminated with heavy metals. Factories found to have illegally discharged pollutions may be subject to seizure or forced to cease operations and, as with the Environmental Protection Law passed in 2014, government officials who fail to enforce the provisions of the proposed law would be subject to administrative penalties. According to Luo Qingquan, the deputy head of the NPC’s environment and resources protection committee, the condition of soils in China is “grim” because soil is the “ultimate receptor” of air and water pollution and can lead to the contamination of food grown in such soil. The Ministry of Environmental Protection has allocated a budget of CNY14.6 billion ($US2.1 billion) this year to fund soil remediation projects, but given the vast acreage of affected farmland already found to be contaminated, addressing the problem on a nationwide scale could cost up to CNY1 trillion.

Despite the size of the challenge, the new soil pollution law, if passed, will represent a key milestone in the development of China’s environmental regulations, and will arm regulators with a powerful tool in the fight against pollution.

This article is made available by Latham & Watkins for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. Your receipt of this communication alone creates no attorney client relationship between you and Latham & Watkins. Any content of this article should not be used as a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.

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